Daily Morning Note – 6 December 2021
S&P 500 futures were higher even after a losing week on Wall Street as investors ditched equities amid concerns over the new omicron Covid variant and the Federal Reserve’s move to tighten policy. Nasdaq stock futures were the underperformer on Sunday following a big drop in bitcoin over the weekend and as investors continued to rethink owning tech stocks with high valuations. Futures contracts tied to the Dow Jones Industrial Average gained 124 points, or 0.4%. S&P 500 futures were 0.3% higher. Nasdaq 100 futures hovered around the flatline. The Dow and S&P 500 fell 0.17% and 0.84%, respectively, on Friday. The Nasdaq Composite was the underperformer, sliding 1.92%.
Singapore’s regulator has suspended Bitget, a crypto exchange that got into a dispute after promoting the digital currency Army Coin, named after the South Korean boy band BTS’s followers, the Financial Times reported. Bitget, a sponsor of Italian football team Juventus, advertised Army Coin as a way to provide lifetime financial support to BTS members. But BTS’s agency Hybe said late October the coin has no connection with BTS and threatened to take legal action.
SIA Engineering Company (SIAEC) has signed a 10-year agreement with Safran Aircraft Engines (SAE) to provide engine test services for the CFM LEAP-1A and -1B engines. In a bourse filing on Dec 4, SIAEC said it will provide the engine test services at its engine test facility, which will be upgraded with the latest data acquisition and control system from Safran Test Cells. This is an expansion of SIAEC’s existing engine maintenance services agreement with SAE to provide engine on-site support, quick turn and boroscope inspection services for the CFM LEAP-1A and -1B engines.
The board of QT Vascular said there may be “further matters to be established or followed up on” regarding the proposed new directors, including whether the new board will remain in compliance with the code of corporate governance. Requisitioning shareholders Mission Well Limited and Tansri Saridju Benui had called for an extraordinary general meeting (EGM), to be held on Dec 6, for shareholders to vote in Tansri, Mission Well director Christian Kwok-Leun Yau Heilesen and 3 others – Leung Yu Tung Stanley, Zhou Jia Lin and Chay Yiowmin – as new directors of the company.
Mobile satellite communications company Addvalue Technologies on Sunday (Dec 5) announced that it has secured funding for up to S$13.2 million from investors led by privately owned investment and development firm Economic Development Innovations Singapore (EDIS). Other investors include certain creditors and staff of Addvalue as well as all the directors of the company. First, Addvalue will issue up to 449.2 million new shares to the investors at the subscription price of S$0.0127 each.
Chinese developer Sunshine 100 China Holdings has defaulted on US$178.9 million of debt and interest payments due Sunday (Dec 5), as the direct fallout of the woes of property companies in China continues to impact investors in Singapore. Sunshine 100 was due to repay the US$170 million of principal and US$8.9 million of interest on its 10.5 per cent senior notes due 2021, which is listed on the Singapore Exchange (SGX). But in a bourse filing on Dec 5, the company said it is unable to meet its debt obligations on the bonds “owing to liquidity issues arising from the adverse impact of a number of factors including the macroeconomic environment and the real estate industry”.
Hong Kong Exchanges & Clearing (HKEX) plans to establish a representative office in New York to market its offerings in the US amid increasing doubts over the former British colony’s status as a financial hub. The new office will comprise of only about 5 staff, people familiar with the plans said, asking not to be identified discussing private information. The exchange will need regulatory licenses and plans to open the office as early as next year, the people said.
The World Petroleum Congress (WPC) kicks off this week with a sharply trimmed roster of energy executives and government ministers to grapple with the oil market’s future as the spread of the Omicron Covid-19 variant disrupted travel. This year’s 4-day event, rescheduled from 2020 due to the pandemic, brings together the industry’s main players about every 3 years. It was expected to feature officials from countries including Saudi Arabia, Nigeria, India and the United States discussing the role of new technologies and low-carbon strategies.
The number of container ships headed for the busiest US port complex has risen to close to 100 under a new counting method, underscoring the magnitude of the economy-restraining logjam that the Biden administration is trying to help alleviate. The backup outside the adjacent ports of Los Angeles and Long Beach, California, involves 96 container carriers, up from 86 on Nov 16, when a new queuing system took effect and dozens of arriving ships stayed outside the official area to be counted, according to the Marine Exchange of Southern California. The revised measure released late Friday includes those eastbound vessels farther out in the Pacific.
Source: SGX Masnet, The Business Times, Bloomberg, Channel NewsAsia, Reuters, CNBC, PSR
Manulife US REIT – Highly anticipated entry into high-growth cities
Recommendation: ACCUMULATE (Maintained), Last Done: US$0.695
Target Price: US$0.84, Analyst: Natalie Ong
– Acquisition of three assets located in high-growth Sun Belt and magnet cities of Phoenix and Portland will increase exposure to tech and healthcare tenants from 9.5% to 12.8%.
– DPU accretion of 4.4% based LTV of 59% with potential 9.0-14.7% upside from under market rents in next major renewal cycle in 2024.
– Maintain ACCUMULATE and DDM-based TP (COE 9.1%) of US$0.84. No change in estimates pending the completion of EFR and acquisition. Prefer Prime US REIT (PRIME SP, Accumulate, TP US$0.94) in the sector for greater tenant exposure to STEM/TAMI sectors.
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